To the Voters, Taxpayers and City Electrical Customers of Natchitoches,
As former elected Natchitoches City Administrators we recently wrote you concerning our grave concern that we have over the electrical rate increase imposed on Natchitoches citizens and businesses last summer, 2023, as well as the impending rate increase scheduled for this May, 2024. We can fully understand the rate increase if it were being used to pay for the direct cost of the utilities, but it is NOT! This unprecedented and unwarranted tax on our utilities is a burden on our citizens and is crippling our businesses as evidenced by the recently announced closings of multiple businesses in Natchitoches!
The Mayor recently appeared on the Billy West Live podcast to try to defend their utility rate increase. He said “that due to inflation they had to go up on the utility rates to financially sustain the City. It was a good business decision!” He compared the price to purchase a Big Mac several years ago to today’s increased inflated price.
As Paul Harvey would say, “Now here is the rest of the story!” While the Mayor was quick to emphasis the impact that inflation has on the City’s expenses, he failed to discuss the effect inflation has on the City’s revenue base.
All cities, including Natchitoches, are run primarily on the collection of sales and use taxes. When the cost to purchase that Big Mac doubles, the sales tax doubles and is remitted to the City. Every item that you purchase as a consumer, the sales tax goes up accordingly based on the new inflated prices. Despite Natchitoches’ declining population and Northwestern’s declining student enrollment, sales tax revenue collections to the City have increased dramatically due to inflation over the last five years. The sales tax collections to the City have increased from $9,904,398 in 2018 to $13,664,451 in 2023. All the previous Administrations for the City of Natchitoches have endured inflation and have NEVER raised or taxed your utilities to compensate. The City of Natchitoches’ revenue collection has and will always parallel any inflation to offset higher expenses. So, inflation is NOT the culprit to warrant a tax on your utilities!!
A recent Public Records request yielded a well documented City of Natchitoches Utility Rate Structure Study. Each utility was evaluated independently as a stand a-lone budget item.
The critical issue that led to our recent electrical rate increase was pointed out in the study. “The City Administration has been routinely transferring operating income and utility reserves from the Utility Fund to the City’s General Fund for non-utility use. The transfers out of the Utility Fund have ranged from $6,246,396 to $8,913,,605 with a $6,300,000 planned transfer in the current budget. The study points out “this level of transfers of utility funds can not continue without serious damage to system integrity and customer service. More recently, the City has been required to utilize funds from its Utility Fund Reserves account to cover its revenue shortfall created by the level of transfers from the UTILITY Fund. Further, the Utility Funds Reserve account has been depleted to the point of no longer having sufficient reserves to cover any major system expenditures for improvements or in response to emergency conditions. This situation could be addressed by reducing or eliminating transfers to non-utility departments or by increasing electric utility rates.”
YOU GUESSED IT!! Rather than addressing expenditures and transfers to the General Fund for their continued non-utility spending, the City Administration chose to place an unprecedented tax on your electric utilities by raising the rates that you must pay to continue your electrical service.
As a result of the “Covid Crisis” all local governments, including Natchitoches, received a windfall of stimulus money for supplemental pay for its employees, infrastructure improvements, and various grants. The Mayor is taking credit for Natchitoches getting between $30-40 million dollars in State and Federal assistance. The windfall coupled with the multi-million dollar increase in sales tax revenue should have been more than enough income to produce a healthy budget for our City.
If the City Administration is truly a Public Servant, they will rescind the SECOND RATE INCREASE (TAX) on our electric utilities before the 2nd proposed rate increase in May 2024, and before there is irreparable damage to the economic stability and FUTURE of our City!
NO MORE TAX AND SPEND!!!
Wayne McCullen, Councilman-at-Large 1980-2000 Mayor 2000-2012
Don Mims, Councilman-at-Large 2000-2020
Jack McCain, Jr., Councilman District 1 1988-2012
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